Bitcoin is the most famous cryptocurrency in the world today. It has gone through various ups and downs, since it appeared. What do the next 20 years hold in store for bitcoin?
Over its life, bitcoin has changed the world views global finance and other activities such as buying for products from Newegg, Overstock, Cheap Air and services like Hosting for websites, Domain Name Registration, VPN etc, playing online slots games kostenlos and many more. It has provided the framework to create other cryptocurrencies. Each instance you get to hear the latest bitcoin news, it appears to stick to a similar pattern.
Initially, you come across reports of the latest innovations or guidelines, which can lead to the collapse of bitcoin. This is mostly utilized to describe a plunge in the price, a drop in bitcoin price USD, etc. It’s followed by a price increase. After that, the news says about the instability and continuance of the debate as for bitcoin’s development.
Understanding Bitcoin
Before we proceed with looking at what to expect for bitcoin in the next 20 years, we need to understand it first by looking at the evolution of bitcoin. It’s had an unstable history with regards to trading ever since it came into existence in 2009. This idea was conceived in 2008 by Satoshi Nakamoto. Then, in 2009, it was released as open-source software. The first instance of a real-world transaction occurred when a bitcoin miner bought 2 pizzas for 10,000 bitcoins.
Since it came out, there has been a lot of action. At first, it cost basically nothing. The initial actual increase in bitcoin price happened in July 2010 when it has moved from about $0.0008 to $0.08 for one coin (that is 1 BTC to USD).
This cryptocurrency is decentralized and utilizes peer-to-peer tech, which allows things such as money issuance of currency plus processing of transactions to be done by the network. Whereas this decentralization leads to non-interference by the government, there won’t be any central organization or authority to guarantee that everything goes smoothly.
This cryptocurrency is digitally created via bitcoin mining, which needs powerful computers to solve complicated algorithms.
What’s Money?
That’s the core of the discussion. Once the public decides that a free market system is a king, will this type of cryptocurrency replace government-regulated currency, thus bringing about a bitcoin revolution? Or on the other hand, will leave the world’s financial system to the public lead to extreme instability, which would make bitcoin a valuable currency? Various people have different viewpoints.
Any significant debate on this issue starts with the meaning of money. Any currency is supposed to possess the quantifiable degrees of:
- Scarcity
- Durability
- Usability
- Divisibility
- Recognizability.
Bitcoin seems to possess all these five crucial components of currency. However, if you look at it keenly, it might not fulfill some of these criteria. This is particularly evident with scarcity, although it might not be what you may think.
Convenience of Bitcoin
Some companies and small ventures accept bitcoin as a form of payment for a service or product. You can also use it to play different online games, for instance, Book of Ra. However, in spite of existing for several years, most businesses still want to receive payments in the form of fiat currency.
This is because cryptocurrencies such as bitcoin, are very unstable to possibly utilize, as the chief means of carrying out business transactions. This will not change when the supply and demand for bitcoin increases.
Instability will become worse. Whereas most governments can, at times, do it badly, the fiat currency’s value is stifled by the central bank to establish stability. When it comes to bitcoin, the sole thing ascertaining its value is purchasers plus sellers. Simply stated, not many companies will accept bitcoin now.
That can change the moment this cryptocurrency endures a bad crash, which no one will be prepared to ward off.
Boundless Supply of Bitcoin
Indeed, the number of bitcoins that will ever be mined is limited: around 80% of 21 million bitcoins have been discovered and are presently in circulation. Those, which haven’t been mined yet, will be, at some point, and then that is it.
The finite number of them implies that its future value is going to be dictated by supply and demand. However, there’s an issue with this notion — there’s no restriction on other cryptocurrencies that can be created.
This doesn’t happen with fiat currencies. While governments are entitled to print more cash, for the most part, they have a limit when doing so, because uncontrolled printing of money devalues the currencies and thus leads to inflation.
What’s more, any individual who wishes to possess another nation’s currency must exchange the existing one. Internationally, the amount of money that may be held at a particular time is limited, therefore guaranteeing that the currency is at least valuable.
Unregulated cryptocurrencies don’t have any creation limit. Therefore, their creators can continue to do so, provided that there are people ready to exchange the normal currencies for them. In order for bitcoin to thrive as a genuine worldwide currency, there shouldn’t be other types of cryptocurrency. Others include:
- Ripple
- MintChip
- Litecoin
Conclusion
If bitcoin has its blemishes, why has it lasted for this long? The simple answer to this is that not everyone thinks that this cryptocurrency is blemished. There are ardent followers of it, who’ll, for instance, download the bitcoin wallet and use it for various transactions. Or if there is an individual who wishes to be a bitcoin trader, then this premise will be around for many years to come.
You need to be aware that cryptocurrencies haven’t been really tested yet. Neither were they used in the eyes of the public nor in the event of a crash. On the other hand, a fiat currency such as the USD, has endured these tests. Probably in the coming 20 years, bitcoin might encounter such an exam, and we’ll get to see some intrinsic blemishes. What do you think will happen to this digital currency in the coming 20 years?
Author’s Bio
Thomas Glare is an ICT expert, blogger, and entrepreneur. He has written extensively on economics, information technology, global finance, and technology. Also, he has articles about bitcoin and its emergence as an alternative financial system to the common fiat currencies since 2013. He has tried his hand at bitcoin trading.
